Forex Signals Brief for September 12th: The USD is Back with a Vengeance

Morning Guys!

Just when it looked like the USD and US equities were in trouble, they come hitting back hard. Finally after days of negativity and worry over North Korea and Hurricane Irma, markets finally got the relief rally they were hoping for. And they sure made it count.

Worldwide stocks rallied and the safe havens that had been on a tear eased off as the ‘risk on’ sentiment was back in vogue.

It’s a big day for traders of the pound with CPI data being released. The GBP has been rocketing higher, and this might be another chance to get some more upside. Elsewhere the safe havens have pulled back a touch which is good news if you’re looking for some good opportunities to buy.

Hopefully it's another interesting and profitable day for forex traders!

Top Economic Events Today

The GBP is the headline act today with a string of data out that is sure to bring in the volume.

GBP – CPI

CPI is out at 8:30 GMT, and analysts are predicting the YoY number to come in at 2.6% which is up from last month. CPI is a key metric for central bankers and a higher reading gives room for interest rate hikes which are a key driver of forex markets.

GBP – PPI

PPI is out at 8:30 GMT and analysts are predicting the MoM number to come in at 1.3% which is up from last month's reading of 0.0%. PPI (Producer Price Index) is similar to CPI in that it is a good gauge of inflation.

EUR – ECBs Constâncio Speaking

The ECBs Vítor Constâncio speaking in Germany at 13:45 GMT on "Monetary Policy in non-Standard Times."

GBP/USD – Ready to Take Out The Highs

With CPI data out today and the recent strength we’ve seen in the pound, traders are eyeing off the highs. A strong number would suggest that we are ripe to test 1.3250, and I suspect it’s only a matter of time before we take them out and make another leg higher.

GBP/USD – 240 min Chart

Key Levels

GBP/USD – Trading Plan

The next key resistance level at 1.3250 is the one I’m interested in. Depending on the data, that might be enough for us to start the move to the next level. Down below, it appears support is few and far between. But given the bullish sentiment I’m more focused on the upside.

If we can get a strong beat I’m looking to buy ahead of a test of the highs. Alternatively, if we can break and hold above 1.3250 then I’m prepared to buy for a longer term move.

EUR/USD – A Strong USD Brings us to a Key Trendline

The USD rally yesterday has brought us right back to the trendline that has developed over a number of days. It’s been holding strongly and I’m looking for the longer term upward momentum to continue.

EUR/USD – 240 min Chart

Key Levels

EUR/USD – Trading Plan

We are right at the trendline on the 240-min chart. So for aggressive traders it might be a chance to buy around 1.1950. The key to watch out for is just how much follow through we get in the USD. Obviously any strength will hurt the EUR/USD. However, given the fact that we held up well, I’m still happy to be long in this region.

It looks like another exciting day for forex traders – good luck out there today!

ABOUT THE AUTHOR See More

Rowan Crosby

Asia-Pacific Analyst

Rowan Crosby is a professional futures trader from Sydney, Australia. Rowan has extensive experience trading commodities, bonds and equity futures in the Asian, European and US markets. Rowan holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.

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